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Dodo Payments operates as your Merchant of Record (MoR). We are the legal seller of your digital products, so we take responsibility for payment processing, sales tax, and compliance while you build and sell your product.

220+ Regions

Accept payments from 220+ countries and regions

40+ Payment Methods

Cards, wallets, and local methods

No Sales Tax Filing

We file and remit sales taxes

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What Is a Merchant of Record?

A Merchant of Record is the legal entity that sells to your customer, appears on the customer’s card statement, and is responsible for the transaction. When Dodo Payments is your MoR:
  • We are the legal seller. Dodo Payments appears on bank statements and receipts.
  • You are the product creator. You build, price, and deliver your product.
  • We run the back office. We handle sales tax, compliance, billing, and the dispute process with card networks.
  • You receive net payouts. Your revenue, after tax and fees, is paid to your bank account.
A Merchant of Record works like an outsourced global finance team: it issues invoices, collects and files sales taxes, and runs billing for every sale.

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Why Use a Merchant of Record?

Selling digital products worldwide means following VAT rules in Europe, GST in Australia, sales tax in the US, and requirements in many other jurisdictions. Each jurisdiction has its own rules, rates, thresholds, and filing deadlines.
Example: You sell a €50/month subscription to a customer in France.Without MoR: You register for French VAT, charge €60 (€50 plus 20% VAT), file French VAT returns, and answer French tax audits.With Dodo: We collect €60, remit €10 VAT to France, and pay you €50 minus fees.

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PSP vs. MoR: Key Differences

A Payment Service Provider (such as Stripe) and a Merchant of Record both process payments. They differ in who is the legal seller.

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Payment Service Provider (PSP)

A PSP processes transactions, and you remain the legal seller:
With a PSP, you are responsible for tax registration, collection, filing, and remittance in every jurisdiction where you have customers.

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Merchant of Record (Dodo)

An MoR becomes the legal seller and handles tax and compliance end to end:
With Dodo as your MoR, we handle sales tax and compliance, and give you tools to prevent and respond to disputes. You receive net payouts without filing sales tax returns.

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Side-by-Side Comparison

Important: Both PSPs and MoRs process payments. The key difference is who is legally responsible for tax compliance on each sale.
Chargebacks stay your responsibility with an MoR. When a dispute opens, the disputed amount and a dispute fee are deducted from your balance, and you accept or challenge the dispute from your dashboard. Dodo Payments provides Visa RDR, Ethoca alerts, and deflections to prevent disputes. See Disputes.

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How Tax Compliance Works

Dodo handles the tax lifecycle for every sale:
1

Customer Location

We use the customer’s country and postal code to determine which tax rules apply, such as VAT, GST, or sales tax.
2

Rate Calculation

The tax rate depends on the product’s tax category, the customer’s location, and whether the customer is a business. For example, EU business customers with a valid VAT number get reverse charge applied.
3

Collection at Checkout

Checkout shows the tax and collects it with the payment, so customers see exactly what they pay.
4

Filing & Remittance

We file returns and pay the collected taxes to the relevant authorities. You do not file sales tax returns for these sales.

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Revenue Flow

This example follows a $200 sale to a customer outside the US with 15% VAT:

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Example Payout Breakdown

Transaction fees are calculated on the total amount including tax, using standard pricing. The international fee applies because the customer’s card is issued outside the US. Subscription payments add 0.5%. A payout fee is deducted per payout, not per sale. See the pricing page and Payouts Process.

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When to Choose MoR vs. PSP

Dodo Payments suits you if you:
  • Sell digital products, SaaS, or subscriptions
  • Have customers in multiple countries
  • Want to avoid registering for sales tax in each country
  • Prefer outsourced, predictable tax compliance
  • Value speed to market over full control
  • Want fraud screening and dispute prevention built in
Many businesses start with a PSP and move to an MoR as they grow internationally. Dodo Payments offers migration support for this move. See Migrate to Dodo Payments.

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Frequently Asked Questions

Dodo Payments appears as the merchant. By default, the statement descriptor is DODOPAY_ followed by up to 14 letters of your business name, for 22 characters in total. You can customize it in your business profile. Customers also receive receipts that show your product information.
Yes. You control pricing, branding, product delivery, and direct communication. Dodo handles billing, and your brand appears in checkout, emails, and invoices, so customers know they are buying from you.
Business customers can enter their tax ID, such as an EU VAT number, at checkout. We validate it, and where reverse charge applies, no tax is collected: the buyer accounts for the VAT in their own return.
Yes. With Bring Your Own Processor (BYOP) you can connect your own Stripe or Adyen account and route payments from selected countries through it, while Dodo Payments continues to power products, subscriptions, invoicing, and analytics. Countries you do not explicitly route keep flowing through Dodo Payments as your full-service Merchant of Record, so we remain responsible for tax on those routes.
Start refunds from your dashboard. The refund goes back to the customer’s original payment method, and the ledger records it in the currency of the original payment. The tax on the refunded amount is reversed automatically.
Dodo handles sales taxes (VAT, GST, and sales tax) on customer transactions. You remain responsible for your business’s income tax, corporate tax, and any tax obligations on the payouts you receive.
We accept payments from 220+ countries and regions. See the full list:

Supported Regions

View all 220+ countries and regions where we accept payments.

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Last modified on September 26, 2026